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ENERGY

French electricity bills set to decrease from February 2025

France's energy commission has announced it will delay the revaluation of electricity prices until February 2025, when it expects the cost of electricity to decrease.

Published: 12 September 2024 10:50 CEST
French electricity bills set to decrease from February 2025
An illustration photo showing an electric light bulb in Paris. (Photo by JOEL SAGET / AFP)

The French energy regulatory commission (commission de régulation de l’énergie, CRE) had planned to re-evaluate electricity prices for the regulated (flat-rate) tariff plan in August 2024, but this has been postponed to February 2025, according to French daily SudOuest.

The revaluation in February will take into consideration the rise of transmission costs, as well as a predicted decrease in electricity prices, CRE announced on Wednesday.

As a result, the higher transmission costs are expected to be offset by decreased electricity prices, leading what CRE predicts will be a 10 percent total decrease in bills for those on the regulated electricity tariff plan.

What does this mean for household bills?

This change will affect people who are on the ‘regulated rate’ plan, also called the tarif bleu. According to SudOuest, there are 22.4 million of these contracts, including both households and small businesses.

According to Ouest France, this means that for the average French household – who sees annual electricity bills of €2,000 – they would save at least €200.

There are other types of electricity contracts in France who are not included in this change – for example, the peak hours contract, which differs from the flat-rate because it offers a lower price per kilowatt during off-peak hours, and a more expensive one during peak hours.

The 17.5 million contracts (which include households and businesses) that are not on the regulated tariff plan will see an increase in transmission prices from November 1st.

Why the delay?

The revaluation was initially planned for August, but it was pushed back to February at the behest of the French government, SudOuest reported.

The French government, who was at the time concerned with an ongoing political crisis after snap parliamentary elections, was reportedly concerned that swinging prices would be confusing for consumers.

In 2021-2022, amid inflation, post-Covid recovery and the war in Ukraine, electricity prices soared by more than 43 percent, despite a price shield the government put into place.

Therefore, the French government asked that CRE make a decision that “takes into account their recommendations for stability”.

CRE thus decided that they would put the annual transmission update into force on November 1st, but “in the interest of price stability and clarity” they promised to postpone the increase for households and very small businesses on regulated tarif plans until February, when the fall in electricity prices is expected to occur.

How is the electricity price calculated?

In France, in addition to the type of plan you have, the final price of electricity depends on three components – transmission costs (or the tarif réseau), the price of the electricity itself (which includes marketing costs, the supplier margin and energy supply costs), and the tax applied.

As for the February revaluation, it is the tarif réseau component that will increase by one percent from February 1st, but the CRE believes this will be absorbed in an overall decline in the price of electricity, leading to 10 percent drop in flat-rate bills.

The price of electricity still remains higher than pre-2021, when the cost was between €40-50 per megawatt hour (MWh).

Prices are currently stabilising around €60-70 per MWh, which is far lower than peaks seen in 2022.

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TAXES

What to do if you’re struggling to pay a French tax bill

Income tax bills come due in France from September 26th, while property owners will also be receiving property tax bills in the autumn – but if you’re worried about your ability to pay, options are available.

Published: 12 September 2024 10:30 CEST
What to do if you’re struggling to pay a French tax bill

France is a highly taxed country, so if you live here you probably already accept the fact that you will be paying a lot of tax.

But if you’re struggling to pay the bills, you have options, and in most cases the initial advice is the same – contact your local tax office and ask for help.

Income tax

If you’re registered with the online tax portal and make your declarations online you will have already given your bank details to the tax office and they will take the money out of your account directly (after sending you a bill so you know how much will be going out).

If you owe more than €300, the money will be taken in four instalments – this year the payment dates are September 26th, October 25th, November 25th and December 27th.

Defer payment

If you’re concerned about your financial situation you may request a deferment (a délai de paiement) from tax authorities, giving you more time to pay what you owe. 

If you’re asking for a deferment, you can do so online:

  • Log on to your personal space at impots.gouv.fr, and access “messagerie sécurisée” (secure messaging);
  • Click on “écrire” (write);
  • select “j’ai un problème concernant le paiement de mes impôts” (I have a problem paying my taxes);
  • then “j’ai des difficultés pour payer” (I am having trouble paying);
  • Select the tax concerned and follow the instructions on the form.

If you prefer to deal with the matter face to face, you can visit your nearest tax office.

Whether you are asking online or in-person, you must provide a completed difficultés de paiment form – find that here – plus;

  • your tax demand;
  • a bank statement;
  • supporting documents showing your incomings and outgoings (such as pay slips, rent bills, utility bills, etc).

Be aware that deferment requests are handled on an individual basis.

Write off a bill

In certain cases – if you have recently been made redundant, for example – you may ask for tax relief (known as a remise gracieuse), in which part or all of your bill is written off.

Your request for a remise can be made online, using the secure messaging system mentioned earlier. Alternatively, you can go to your nearest tax office in person.

You should fill out a completed difficultés de paiement (payment difficulties) form, and attach or take along corresponding documents.

  • Tax authorities will take into account, in particular, an unforeseeable loss of income (unemployment, for example);
  • Other exceptional circumstances (such as the death of spouse, separation, disability) or abnormally high expenses (illness);
  • a disproportionate difference between the size of your tax bill and your level of income.

Ability to pay

When you apply for a deferment or relief, your ability to pay is analysed, taking into account, among other things:

  • your assets and the resources of people living with you, whether taxable or not (social benefits, municipal assistance, RSA, etc.);
  • essential household expenses (food, healthcare, insurance, housing, transport to and from work, etc.);
  • whether your expenses match your resources and the composition of your household.

Be aware that, if your expenses exceed your financial capacity solely because of your lifestyle choices, your application will be rejected.

Furthermore, depending on your situation, the granting of tax deferment or relief may be subject to :

  • prior payment of outstanding taxes;
  • the filing of a tax return, if you are not fully up to date with your tax obligations;
  • a waiver of any litigation relating to the taxes concerned by the application.

Usually, requests for deferred payment or tax relief are processed within two months. If you have not received a reply within this period, you should assume your request has been rejected. 

But this period may be extended to four months if your situation is complex. In this case, the administration must inform you of this extension before the initial two-month deadline expires.

Property tax

If you own property in France, autumn is also the time when you will be getting property tax bills (tenants no longer pay property taxes after the phasing out of the taxe d’habitation.

All property owners get a bill for taxe foncière while second-home owners will also get a bill for taxe d’habitation – find a full explanation of the system HERE.

Many people have noticed a steep rise in property tax bills in recent years, due to changes in the tax system. If you think your bill is incorrect, here’s how to challenge it.

If the bill is correct, but you are having difficulty paying you can contact your local tax office as described above to request a deferment of the bill. Property tax can also be paid in monthly instalments, rather than all at once.

There are also some groups who are exempt from paying, or entitled to a reduced rate.

It’s sometimes mentioned that older homeowners in France are exempt from taxe foncière (property owners’ tax). This is wrong, but depending on your situation, assistance in the form of a reduction or an exemption may be possible. 

If you are over 75 years old on January 1st of the tax year, you can benefit from an exemption from property tax for your main residence (not a second home). Two additional conditions must also be met.

Concerning the occupation of the accommodation:

  • you live alone or with your spouse or civil partnership partner;
  • you live with dependents for the calculation of income tax (children, dependent persons).

Concerning your financial resources: 

  • the amount of your reference tax income from the previous year must not exceed a certain ceiling specified by article 1417-I of the General Tax Code, which is set by a decree published each year;
  • The income limits not to be exceeded depend on the number of parts retained for the calculation of income tax;
  • Holders of the solidarity allowance for the elderly (ASPA) or the supplementary disability allowance (ASI) are exempt from the financial resources requirement.

If you are over 65 and under 75 on January 1st of the tax year, you can benefit from an automatic reduction of €100 on property tax on your main residence.

Two additional conditions must also be met:

  • you occupy your accommodation under the conditions listed in the exemption from property tax for persons aged over 75;
  • the amount of your reference tax income from the previous year does not exceed a certain ceiling specified by article 1417-I of the General Tax Code.

Neither of these exemptions can be used for second homes. Since the taxe d’habitation is now only paid by second-home owners the opportunities for a deferment or exemption are very limited, since the tax office assumes that second-home owners are financially stable.

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